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Former Wyoming Sen. Alan Simpson (left) and former White House Chief of Staff Erskine Bowles.

What are we to make of the fact that the CEOs of more than 80 of the nation’s largest corporations, including Aetna, AT&T, Dow Chemical, GE, Merck, and Microsoft have signed on to a statement calling for a deficit reduction deal that includes both money-saving reforms to Medicare, Medicaid and Social Security and a “pro-growth tax reform" which lowers rates and raises more revenues?

Significantly, the statement cites recommendations issued in December 2010 by President Barack Obama’s bipartisan deficit reduction commission, which ostensibly would have cut the projected deficit by $4 trillion by 2020, as “an effective framework for such a plan”. (Not coincidentally, the CEOs' statement was coordinated by the Campaign to Fix The Debt, an organization founded by the co-chairmen of that deficit commission, former Wyoming Republican Senator Alan Simpson and Democrat Erskine Bowles, the former chief of staff to President Bill Clinton. )

Last year, a different group of more than 100 less high powered corporate and not-for-profit executives issued a similar call for both tax hikes and spending cuts. But now that the big dogs were barking, the CEOs themselves, as well as long-time anti-deficit crusaders, treated this as a very big deal. A story about the CEO’s “manifesto”---given in advance to the Wall Street Journal—ran atop the front page of that paper today. Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt, even got to ring the opening bell at the NYSE today, with CEOs and other deficit deacons at her side. In their statement, the CEOs call the debt “a serious threat to the economic well-being and security of the United States” and describe it as “urgent and essential” that a bipartisan plan be put in place to stabilize federal debt as a a share of the economy and get it on a downward path.

Well, yeah. But there’s one not so little problem. Some of the same business leaders who now sincerely want a deal, have helped create the Washington gridlock blocking a deal by funneling big bucks to organizations and candidates emphatically opposed to any tax increases as part of a compromise.

As Washington Post economics columnist Steven Pearlstein wrote last July, after attending a coming out dinner for the Fix The Debt CEOS:

The reality now facing practical, pragmatic corporate executives is that their Washington lobbying apparatus has become one with a Republican caucus on Capitol Hill that is dominated by ideological zealots and uncompromising partisans. So if they have now concluded that the most important issue for American business, and the economy, is getting a reasonable bipartisan compromise on taxes and spending, their only choice is to bypass that apparatus.

Just for fun, go to the Web site of the U.S. Chamber of Commerce, which has become nothing more than a political money-laundering operation for the Republican Party. There you will find an endless stream of hysteria, histrionics and hyperbole demonizing Obama and warning of economic Armageddon if taxes are raised. And yet this is the same Chamber of Commerce that gets much of its income from the same corporations whose chief executives now consider a budget compromise involving higher taxes as their top priority.

According to the Center for Responsive politics, the Chamber of Commerce, through Oct. 1 of the 2012 election cycle, had spent nearly $27 million advertising either directly against Democratic candidates or for Republican ones. (It also spent $650,000 on advertisements favoring Democrats and $3.5 million on election ads that didn’t name a candidate.) While the Chamber of Commerce, as a not for profit, does not have to disclose its donors, some corporations do report on their contributions; among those who have disclosed big giving to the Chamber are Aetna, Dow Chemical, Merck and Microsoft.

“It’s great to have corporate CEOs engaged on the issue, but you have to take this effort with a little grain of salt,’’ says veteran budget analyst Stan Collender. “The real test will be whether they withdraw support from members of Congress who aren’t supporting balanced deficit reduction. Will they put their money where their mouths are?”

The Simpson-Bowles plan called for far bigger tax increases than is commonly understood, as well as changes to Social Security and Medicare that parts of the Democratic base dislike. The plan is often said to have $3 in spending cuts for every $1 of tax hikes. But that’s somewhat deceptive. Simpson-Bowles used what it called a “plausible” baseline which assumed that the Bush era tax hikes for families earning more than $250,000, as well as stimulus expansions of the college credit and earned income tax credit are allowed to expire and that the estate tax exemption falls back from its current $5.12 million to $3.5 million. All that would raise an extra $1.1 trillion over ten years, the Center for Budget and Policy Priorities calculates. On top of that, the Simpson Bowles plan calls for the tax code to be overhauled, with tax rates reduced and almost all tax breaks (including the special low rate for capital gains and dividends) eliminated or curbed. Even the mortgage and charitable deduction would be limited in a sample plan the report offered to get the top rate down to 28%. Such a reform, the Simpson Bowles report said, should leave the wealthy paying the same, or a greater share of the total tax bill as they do now, and raise an additional $100 billion or so a year on top of the tax hikes assumed in the “plausible” baseline.

The report won approval from 11 out of 18 members of the commission, with all three House Republican members, including Vice Presidential Candidate Paul Ryan, opposing it on tax grounds. (All but six House Republicans have signed Grover Norquist's “Taxpayer Protection Pledge” promising to never vote for a tax increase.) Two of three House Democrats and one of three Senate Democrats also opposed the compromise plan, as did a union representative, so they've got some compromising to do on that side of the aisle, too.

Ironically, during the first debate, even while he criticized Obama for failing to embrace the Simpson Bowles report, Republican Presidential candidate Mitt Romney rejected it himself, choosing to stick to the position he took during a Republican primary debate--- that he’d oppose any deficit reduction deal with tax increases, even if the spending cuts were 10 times as large at the tax hikes. Obama, for his part, says the deficit plan he offered last September is similar to Simpson Bowles in its mix of tax increases and spending hikes, but his plan failed to tackle the Social Security changes needed to make that program sound over the long term and made only modest changes to Medicare.